Transcript ERP - Ufuk Cebeci

ERP
Enterprise resource planning (ERP): An expanded
effort to integrate marketing, financial,
manufacturing and human resources in a single
information system. Standardized record-keeping
permits information sharing throughout the
organization.
ERP Systems Include:
Single integrated software
program
Single database
Information shared and
communicated
Automates customer
orders, order fulfillment,
billing, shipping, etc.
Tracking
How SAP’s R/3 Works
An order triggers a chain reaction of events throughout the
enterprise.
1: Ordering A sales rep from International Sneaker Co.
takes an order for 1,000 pairs of shoes from a Brazilian
retailer. From her portable PC the rep taps into the R/3
sales module back at headquarters which checks the price,
including any discounts the retailer is eligible for, and looks
up the retailer’s credit history.
2. Availability Simultaneously, R/3’s inventory software
checks the stock situation and notifies the sales rep that half
the order can be filled immediately from a Brazilian
warehouse. The other sneakers will be delivered in five days
directly from ISC’s factory in Taiwan.
3. Production R/3’s manufacturing software schedules the
production of the sneakers at the Taiwan factory, meanwhile
alerting ISC’s warehouse manager in Brazil to ship the 500
purple tennis shoes to the retailer. An invoice gets printed in
Portuguese.
4. Manpower That’s when R/3’s human resources model
identifies a shortage of workers to handle the order and
alerts the personnel manager of the need for temporary
workers.
5. Purchasing R/3’s materials planning module notifies the
purchasing manager that it’s time to reorder purple dye,
rubber, and shoelaces.
6. Order Tracking The customer logs on to the sneaker
company’s R/3 system through the Internet and sees that
250 of the 500 pairs of shoes coming from Taiwan have been
made and dyed. The customer also sees that there are 500
pairs of orange tennis shoes in stock and places a follow-up
order on the Net.
7. Planning Based on data from R/3’s forecasting and
financial modules, the CEO sees that colored sneakers are
not only in hot demand but are also highly profitable. He
decides to add a line of fluorescent footwear!
The Manufacturing Planning and Execution
Process: From Forecast to Settlement
Demand
Forecast
SOP
Order
MPS
MRP
Execution
Management
•Key
•SOP: Sales and Operations Planning
•MPS: Master Production Scheduling
•MRP: Material Requirements Planning
Settlement
The Manufacturing Planning and Execution
Process: Forecasting
Forecasting utilizes data from the sales information
system as well as profitability analysis. The output of the
forecasting activity becomes the input for sales and
operation planning.
In profitability analysis monetary turnover goals are set
and budgets are determined so that these goals can be
reached.
The Manufacturing Planning and Execution
Process: Sales and Operations Planning
In sales and operations planning medium to long-term
sales quantities are determined and the measures that
have to be made to realize these quantities are roughly
planned (rough estimate of feasibility of these plans).
The Manufacturing Planning and Execution
Process: Demand Management
In demand management the planning and production strategy
is selected (MTS, MTO, etc.) and the requirement quantities
and delivery dates are also determined.
The Manufacturing Planning and Execution
Process: Master Production Schedule
In master production scheduling the parts or products that
greatly influence company profits or that take up critical
resources are planned with extra attention.
The Manufacturing Planning and Execution
Process: Material Requirements Planning
Material requirements planning ensures that the required
materials are procured in the correct quantities at the
right time.
The Manufacturing Planning and Execution
Process: Execution
In execution production orders are created and released.
Further, materials are issued, jobs are tracked, and goods
receipts to stock are posted when the last production
operation is completed.
The Manufacturing Planning and Execution
Process: Order Settlement
In order settlement the difference between actual costs
incurred from the production order and the credits the
order received from goods receipts is cleared.